With respect to final accounts, which of the following statements is correct?
1
The provision for discount on creditors is not provided in keeping with the principle of conservatism.
2
The provision for bad debts is debited to sundry debtors account.
3
The adjustment entry in respect of the income received in advance is debit income received in advance account and in credit income account.
4
The debts written off as bad, if recovered subsequently, are credited to debtor's account.